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California and the West

Home Builder's Earnings Drop 10%

July 28, 2006|From the Associated Press

Irvine-based home builder Standard Pacific Corp. said Thursday that its second-quarter profit dropped 10%, hurt by rising interest rates, growing home inventories and weaker home buyer confidence.

Quarterly net income fell to $96.5 million, or $1.44 a share, from $107.6 million, or $1.54, in the year-ago period. Home building revenue rose to $1 billion from $952.3 million.

Wall Street analysts had been looking for a profit of $1.35 a share on sales of $1.01 billion, according to a poll by Thomson Financial.

"It is difficult to predict when market conditions will stabilize and improve in our primary markets," Chairman and Chief Executive Stephen J. Scarborough said. "However, we are taking the necessary steps to respond to the challenges that we all face while positioning the company for the future."

Scarborough noted that Standard Pacific has slowed its housing starts and reduced capital outlays for land.

The company said it expected third-quarter earnings per share to be 80 cents to 85 cents. The company cut its full-year earnings-per-share guidance to $5.10 to $5.40 from a previous projection of $6.50.

Analysts had been looking for earnings of $1.19 a share in the third quarter and $5.36 for the full year.

Standard Pacific shares closed down 44 cents, or 2%, at $21.66. The shares have traded from $20.24 to $49.70 over the last 52 weeks.

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